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Banks finalize awaited merger

HVB, Živnostenská unite under UniCredit brand after two years

By Michael Heitmann
Staff Writer, The Prague Post
November 7th, 2007 issue

It takes some couples a little longer to move in together.
After a two-year honeymoon, Živnostenská banka and HVB Bank finally merged their operations under the UniCredit brand Nov. 5, creating the fourth-largest bank in the Czech Republic.
The consolidation process has been a long time coming. Italy’s UniCredit Bank acquired Živnostenská banka in 2002 and then added Germany’s Hypovereinsbank (HVB) to its treasure chest almost two years ago.
The merger creates a bank with total assets worth 260 billion Kč ($13.9 billion) and 200,000 customers. Some of the bank’s more than 60 branches will be closed or moved to other locations in order to ensure a more even distribution across the country, but job cuts have not been announced so far.
“We are convinced that all divisions of the group will benefit significantly from building a strong brand around our UniCredit Group master brand,” said UniCredit Group CEO Alessandro Profumo in a statement. “We are a leading European bank — in fact, the first truly European bank, and we want to be perceived as such.”
In a symbolic gesture, the bank, which has 35 million customers across Europe, announced it will switch all of its divisions’ Web sites to its unicreditgroup.eu Internet address, emphasizing its pan-European credentials.
“We have the real ambition to become the No. 1 bank on the Czech corporate banking market within a number of years,” said Jiří Kunert, UniCredit’s chairman in the Czech Republic.
To meet that goal, UniCredit may eye acquiring its competitors. Further consolidation in the Czech banking sector should not be ruled out, said Milan Vaníček, an analyst at Atlantik finanční trhy. Previous remarks by UniCredit’s officials have moved in that direction, he said.
Consolidation under the UniCredit name means the end of the Živnostenská banka brand. Founded in 1868, it was the first bank financed entirely by local capital. It prospered in pre-war Czechoslovakia, becoming the nation’s major bank.
Moving to the UniCredit name lets the bank avoid choosing between the HVB and Živnostenská banka brands, which would likely have alienated people in either company, Vaníček said.
Whereas other UniCredit subsidiaries, such as BankAustria and the German HVB, will retain their names, Živnostenská banka did not have the leverage within the group to retain its traditional identity.
“BankAustria is an excellent brand name for an Austrian bank,” BankAustria CEO Erich Hampel told journalists. Živnostenská’s name, which reflects the bank’s original focus on craftsmen and tradesmen, cannot lay claim to the same inclusiveness.

Michael Heitmann can be reached at mheitmann@praguepost.com


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